Libs’ innovation policy ‘inadequate’

Industry groups have branded the ­federal opposition’s new innovation policy as inadequate, after a low-key launch on Wednesday passed under the radar.

The policy promised to axe the government’s intended changes to ­research and development tax and to “refocus" Commercialisation Aust­ralia. The Liberals also pledged to ­enhance and expand Australia’s venture capital industry.

“We are bitterly disappointed there is not more substance," she said. “It’s great they have highlighted the need to enhance the VC market, but with no ­indication of how that might be achieved we remain concerned."

Ms Woodthorpe said the opposition’s proposal to “review the Innovation Investment Fund to assess its ­effectiveness" was redundant ­because such a review was already under way. She was also dismayed at the opposition’s insistence it would abandon the new approach to R&D tax.

The Gillard government’s tax credit system would change the way companies become eligible for investment in innovation. The new system would make a 45 per cent refundable tax credit available to eligible firms that are not more than 50 per cent owned or controlled by a tax-exempt entity and that have an aggregated turnover of less than $20 million a year.

Ms Woodthorpe said Labor’s would be a very positive system for small business and start-ups.

The Australian Information Industry Association’s chief executive,
Ian Birks
, agreed that dropping the changes would be a mistake. He said the Labor government’s scheme would deliver much better outcomes for the information technology industry.

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The Liberals would retain the existing R&D tax concession system until at least July 1, 2011.

Its policy document said this decision would “restore funding, certainty and consistency to Australia’s R&D tax system". A Coalition government would, however, consider changes to the system “in future but not at the ­expense of . . . [the existing] system".

Innovation Minister
Kim Carr
said this was opposition acknowledgment there was a need for some reform to the system. “They say ‘in future’," he said. “That’s incredibly vague."

A failure to pursue the R&D changes would leave a $1.6 billion hole in the annual budget, Mr Carr said. He repeated a long-standing accusation that the opposition had filibustered the earlier introduction of the system.

“A whole series of amendments were put forward before the election was called, he said. “So they’ve ­opposed it sight unseen." But shadow innovation minister
Sophie ­Mirabella
categorically denied this allegation. “Labor didn’t even bring their legislation into the Senate, so it is absurd to claim that we were somehow filibustering in the R&D debate in Parliament," she told The Australian Financial Review.

Ms Mirabella said the R&D credit system was “deeply flawed" and a “slash-and-burn" effort against Aust­ralian innovators. Ms Mirabella said the former Coalition government had “strongly supported R&D and commercialisation activity", and an ­Abbott government would have ­“exactly the same philosophy".

Mr Birks said he was encouraged by elements of the Coalition’s policy.

“There are some parts that are ­potentially good ideas depending on implementation," he said. “More ­effectively measuring the impacts of innovation would be a good thing. If we could do that we would have a better understanding of what it contributes to overall economic outcomes."

But he was surprised the policy launch had been done so quietly and that raised questions as to how seriously the opposition were taking innovation policy in general.

Mr Carr says the detail of the opposition’s policy painted a very different picture.

“Underfunded doesn’t even begin to describe it," he said. “There is no question they are cutting support for business innovation."